Recently, Goldman Sachs shook the business world by announcing that starting July 2021, it will no longer help companies perform IPOs unless said companies include diversity on its board, with a focus on women. What this decision also means is a significant departure from the all-white, all-male boards that have been the rule for so long, at the expense of the much necessary gender diversity that has been proven to be so beneficial to businesses.
This push for diversity comes right on the heels of much debate by policy experts and lawmakers alike around the lack of gender diversity in the C-suite and boardroom. The MIT Sloan School of Managementactually reveals that while women occupy about 1 in 5 seats on the boards of S&P500 companies, most boards are still mostly composed of men.
Yet, change is certainly looming on the horizon. The state of California passed into law the requirement to have at least one female director on the board of California-based public companies. In addition, companies with board members of 6 or more individuals are required to include at least three new female directors.
As one of two women of color sitting on the board of a not-for-profit organization, I can see first-hand the advantage and influence that gender diversity can bring to companies. The unique perspective, management style, business savvy, and community outreach, among other factors, that women bring to the table, literally can change an organization for the better. If women constitute 50% of the world population, does it make any practical or business sense to keep them out of the boardrooms where decisions for 100% of the population are made?
While there’s still certainly a long way to go, what this means for working women and gender diversity is that there is finally some flicker of a light at the end of the gender diversity tunnel. In more concrete terms, the repercussions are not only motivating but also of a historical proportion:
- There are more incentives for companies to adopt gender diversity
Unfortunately and fortunately, it’s mostly through legal change and business/social incentives that gender diversity may be allowed by the institutions and people who are still resisting it. In this sense, it is up to all of us to create the platform to generate these incentives and legal changes that will drive gender diversity forward, as in the example of Goldman Sachs and the state of California.
- This is a motivating factor for women to stop fearing sitting at the table
For many business women, especially minority women, sitting at the board of a company may seem like a far-fetched dream. However, every day that we are advocating for gender diversity, we are removing one piece of this opposing wall. It’s a great motivating factor to see that not only is it possible to crush this wall, but that it’s our responsibility to do so.
- It’s a win-win for businesses, women and society at large
All in all, increasing the gender diversity on boards is a win-win for all. Businesses win, as their IPO performance, and general performance, is proven to be better when there is at least one woman on their board. Women win, as we extend the fullness of our potential to serve and impact the industries and businesses that in turn impact the world. Society wins, as we all change the meaning of true diversity for the better.
The Corporate Sis.
